EIA projects largest year-over jump in U.S. coal production in 2017

U.S. coal production notched its largest year-over tonnage increase in 16 years in 2017, with the Energy Information Agency (EIA) anticipating 773 million short tons (MMst) for the year, a 45 MMst increase.

EIA also reported on Friday that coal prices also across the country increased in 2017. And, according to EIA estimates, domestic demand for coal totaled 719 MMST, a drop from 731 MMst in 2016. However, decreased demand was more than offset by increased demand for coal exports.

“International demand for U.S. coal was driven by Asian and European countries,” EIA reported. “EIA expects total U.S. coal exports to reach 95 MMst in 2017, a 58 percent increase from 2016. Approximately 31 MMst of coal is expected to be exported to Asia in 2017, nearly double the volume exported in 2016. U.S. coal exports to Asia increased as China, Japan, and India looked to offset disruptions to their supplies of Australian coal caused by Cyclone Debbie in April 2017. Preliminary estimates show U.S. coal exports to Europe reaching 40 MMst in 2017, an increase of 13 MMst from the 2016 level.”

Approximately 90 percent of domestic coal was used by the power sector. The coal share of total power generation for the year is expected to total 30 percent, the lowest level on record.

“The average price of U.S. steam coal used in electricity generation increased in 2017 in several regions,” EIA reported. “The price of Central Appalachian coal, driven by strong domestic and international demand, continued an increase that started during the second half of 2016, rising by an additional 29 percent in 2017, which helped to drive the overall U.S. price increase. Powder River Basin and Northern Appalachian steam coal spot prices increased 4 percent and 10 percent, respectively, in 2017, continuing increases that started in mid-2016. In contrast, Rocky Mountain region coal prices remained flat, and Illinois Basin coal prices fell by 7 percent.”